Although JD.com's (JD -3.78%) recently released first-quarter results pleased many investors and analysts, not everyone has been overly bullish on the company. Early Thursday morning, an analyst made a relatively assertive price target cut on the stock, and the market reacted by trading it down by almost 4% on the day.
A double-digit chop
Well before market open that session, Susquehanna International's Shyam Patil reduced his JD.com price target by more than 10%, cutting it to $40 per share from his previous $45. That didn't change his overall estimation of the stock, as he maintained his neutral recommendation.
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According to reports, Patil expressed admiration for the company's first-quarter performance, writing that user experience improvements were catalyzing growth in the user count. He feels that the Chinese e-commerce giant is also well positioned in its market, and could benefit from ventures into new segments such as food delivery.
That said, however, the relatively shaky Chinese economy could limit JD.com's potential, in his view. Patil also believes that this state of affairs could persist; hence the price target reduction and neutral outlook.
Could this be a sleeper stock?
Getting slightly more bearish on JD.com is a somewhat counterintuitive move these days. That's because the company posted quite encouraging year-over-year growth, especially on the bottom line, in the aforementioned quarter. It also notched rather convincing beats on the consensus analyst estimates.
This indicates that the Chinese macroeconomy might be in better shape than many believe. I wouldn't count JD.com out quite yet, especially if it continues to improve its fundamentals so impressively.
